Federal government broadband initiatives of loans, grants, stimulus funds – all a horrendous failure.

Major carriers and MSO’s – not interested – however will do everything they can to impede alternatives.

Google Fiber – Tier 4 cities and up target – failed and not interested.

With these considerable failures or lack of true interest, then how do we get high-speed broadband service to the rural market where it is seriously needed?  Simple.  We must be self-reliant and not depending upon external entities to make this a reality.  No matter how much they talk about doing it, it is always talk and half measures.

So, that leaves it up to the rural LEC, communities, and cooperatives.   Now then the question is, which of these is most likely to be successful and accomplish this in a timely manner?

To date approximately 150 communities have built out municipality owned and operated broadband networks.  And it should be noted that of these some have been highly successful.  However many have been abysmal failures, resulting in a high cost to the local taxpayers.  Additionally, communities are not truly successful with telecommunications services, with the possible exception of those that are already providing electrical service.  It is these communities that have had the best success, but even then, failures are occurring.

Many Rural LECs are attempting to provide service through their regions and then opening CLEC service outside of their incumbent areas.  While this has proven to be beneficial, even they are ignoring the truly rural market, and predominantly only providing service within city/village limits.   As such, they are not attempting to provide the service to the true rural market.

So, what is the solution?  A new type of cooperative that is focused on creating a broadband network that addresses the rural market.  Creation of a broadband cooperative that designs, builds, and operates a fiber optic network infrastructure that provides:

1. FTTx connectivity within the cities/village city limits and rural homes along designated routes
2. Provides a fiber optic backbone interconnecting these cities/villages
   1. Using this interconnecting backbone to allow for connecting rural homes along the backbone route
   2. Fronthaul/backhaul for mobile towers
3. Fronthaul/backhaul for wireless services for rural homes not along the fiber route
4. Within city/villages, provide WiFi level services within the main business district

The establishment of these type of rural broadband cooperatives is key to providing high-speed broadband services to rural America.  So, the question is how to enable the establishment of these rural broadband cooperatives, as funding sources are unlikely to be easily raised.

The following financing model would allow for all parties to have ‘skin in the game’ while also allowing for establishment of the cooperative needed seed funding.

1. Each community that is in the proposed serving area, provides a subordinate loan based on ‘general obligation bond’ that is valued at approximately $500/$750 per person within the city/village limits (i.e. city population of 1,000 people the city/village shall commit $5-$7.5Million as seed fund loan to the cooperative)
2. Based on the communities’ seed funding, the Cooperative will work with local banks to receive capital loans for the total cost of the build program, broken down into multiple phases
3. Use of revenue generated from predecessor phases, deferring repayment of communities subordinate loans until the build program is completed in all of the start up communities, and the company has become cash flow positive able to pay its operation and capital loans
4. Growth of the network into additional communities will occur only after 100% coverage of the startup communities and service is available to these communities and rural marketplace, albeit payback period might not have been achieved but operational cash flow should be achieved
5. Once established and revenue forthcoming, then organizations like the CFC and RTB could become sources of expansion funds

Key to these models is that maximization of subscriber counts to reduce cost for video content while raising the Internet usage levels but increase of caching and other means will ultimately allow for cost savings as well.

One of the other key aspects that communities would need to provide is right-of-way usage rights.  While the aerial plant in most rural markets are not overly congested, in many circumstances the pole loading would become problematic due to the age of the poles.

Each community would need to be evaluated to see if aerial placement would be the most cost efficient and timely solution.  In many cases while cost might be a savings, time, maintenance, and annual operational costs negates the savings.  In cases like this, and in reality the first thought process, should be the placement of the new fiber optic infrastructure underground.

However, the continued traditional manner should not be adopted.  The use of micro-trenching and use of micro-ducts is a more logical and cost efficient manner for placement.   Communities need to adopt these construction techniques as they represent a significant time improvement and, when accomplished properly, a cost savings.  Of course the key is the means and techniques used for utility locates and reinstatement after the fact.

The key factor this article is pointing out is that high-speed broadband infrastructure is possible for the rural marketplace.  However, out-of-the-box thinking and approaches must be accomplished.  Failure to expand the approach we undertake will keep the rural marketplace without high-speed broadband service.  So the question is, who is willing to undertake the process and make high speed broadband in the rural marketplace a reality?